Quote from Robert Weinstein:
If BP America ends tomorrow the total BP as best I can come up with would drop in value about half. They could let BP america fail and still come close to keeping the dividend or for sake of arguement cut it in half and be the same as they are now. With that being said if you cut the company in half you have a company with a PE of 10 and a yield of 4%+.
I am sure that the main BP corp would be subject to lawsuits but I do not see how anyone could collect if they simply wrote off America. Then you also have the fact that someone has to take over the assets and that could be BP America 2.0 or something along those lines. 100s of billions of dollars of exposure? I think anything is possible but that is really pushing it to an extreme.
I am clearly not happy I stepped in BP as I had my worst day in a while and maybe a top five for the year but it is now trading near the price of the oil reserves. For this stock to go lower one has to believe that the company is taken under by lawsuits including the main corp BP. At some point politics will play a role and I think the damage done while maybe large is not in the ballpark of what the media is saying and leaving us to believe. After all we had a huge leak back in 1979 or about and as we can all see oil is mostly biodegradable and will be gone in a year or two even if nothing was done that would not be done absent the spill. Hotels may have a cause of action but if they can't show that oil is on their beach it is going to be difficult to show how BP caused the hotel harm. Just because the media reports an event does not mean everyone can file a suit and win. An example is if you watch a car crash and someone dies but you are not part of the accident. You can't sue as your not part of the accident and are only a witness regardless of the emotional impact. If a hotel can not show that their beach or water is ruined (and from what I heard on the radio today if I recall correctly only three counties in FL have their beaches closed) I think they may have a lot of trouble showing a cause of action. Just because the media blows it out of reality (not that they would ever do such a thing) does not give a cause of action from what I understand but I am also not a lawyer so I very well could be wrong.
What BP needs is some leadership and this mess will go away like it did for exxon and we will all be wishing we bought as much as we could at these prices. One good news story about the leak being plugged and this stock jumps hard and fast. The day is coming regardless of Mr. Haywards best attempt to let it drag on as long as possible......
Robert, that sucks, I feel for you. I got into BP around the same time as you, near the beginning of this thread. I got 1000 shares @ $37, but I also bought some put protection, I bought 11 July puts with a strike of $40.
In total I'm down about $1100, but considering I should be down about $8000 without the puts, I'm pretty happy. And because of my slightly bearish bias with 11 contracts vs 1000 shares, I actually gained $200 on my position today over yesterday. I'm going to hold BP until OPEX in July, in hopes that some good news pops this back up to over $40.
I don't think BP will go bankrupt, however, considering how crazy people are shitting on this stock, who knows where it will end up.
But BP makes too much money and the US would rather have it around as its lapdog rather than kill it. BP is employing thousands of umemployed people in the South and injecting billions of dollars into the communities, something that wouldn't have been done otherwise, so really this is a win for Obama. Billions of dollars that normally would have gone into the coffers of BP are being diverted into the South, and that's probably the best stimulus package they could ever dream of.
If Obama pushes too hard, which I believe he is stupidly doing right now, they very well could kill the goose that lays the golden egg by inadvertently forcing BP into bankruptcy. Politicians laying into BP and trying to force them to cut the dividend is disgusting... since when should the government be telling a business how to run itself? If they do cut the dividend and the share price falls even further, it could really spin the company out of control, which could seriously derail all these efforts, so these fucking politicians should watch themselves.
